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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Thursday, 21 June 18
ROBUST ASIAN THERMAL COAL DEMAND CREATES OPPORTUNITIES FOR AUSTRALIA - MINERALS COUNCIL OF AUSTRALIA
Minerals Council of Australia reported, Australia’s world-class coal mining industry can create more jobs in Australia and strengthen t ...
Thursday, 21 June 18
CHINESE REDUCED COAL IMPORT RESTRICTIONS - CAIXIN GLOBAL
Caixin Global reported that the Chinese government has reduced restrictions on coal imports at the nation’s major ports in response to concer ...
Thursday, 21 June 18
INDIAN GOVERNMENT ADMITS COAL SHORTAGE, ASKS DISCOMS TO IMPORT - TIMES OF INDIA
Times of India reported that the power ministry has advised all state governments and private power distribution companies to import coal as Coal I ...
Tuesday, 19 June 18
WCA RESPONDS TO BP STATISTICAL REVIEW OF WORLD ENERGY 2018
Responding to BP’s Statistical Review of World Energy 2018, Benjamin Sporton, Chief Executive of the World Coal Association (WCA) said, &ldqu ...
Wednesday, 13 June 18
U.S. COAL PRODUCTION TO DECLINE BY 2% TO 756 MILLION SHORT TONS MMST IN 2018 - EIA
EIA forecasts U.S. coal production to decline by 2% to 756 million short tons (MMst) in 2018.
According to EIA's Short-Term Ener ...
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- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- Planning Commission, India
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Economic Council, Georgia
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Therma Luzon, Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
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